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Foreign Exchange Intervention and Monetary Policy in Japan, 2003-04

Rasmus Fatum and Michael Hutchison

No 05-05, EPRU Working Paper Series from Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics

Abstract: This article examines the rationale behind the massive increase in Japanese foreign exchange market intervention operations in 2003-04, and evaluates its effectiveness both in limiting yen exchange rate appreciation and influencing the direction of monetary policy. The two main questions addressed in this study are: Was the intervention effective in slowing exchange rate appreciation compared to a counterfactual case with no intervention? And, has intervention on such a large scale authorized by the Ministry of Finance been able to directly influence liquidity creation or indirectly influence the stance of Bank of Japan policy?

Keywords: foreign exchange intervention; Japanese monetary policy (search for similar items in EconPapers)
JEL-codes: E51 E58 F31 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2004-10, Revised 2005-01
New Economics Papers: this item is included in nep-cba, nep-fmk, nep-ifn, nep-mac, nep-mon and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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